Good and Bad News From the ABA Futures Report (Perspective)

In case you hadn’t noticed, after decades (centuries?) where the practice of law bumped along relatively unchanged, we are in the midst of a technology driven revolution. Technology, outsourcing, insourcing, and a glut of under- and un-employed recent law graduates has upended a lot of what we thought we knew about the business of law. Part of this revolution assists lawyers — the use of algorithms to handle e-discovery or using lawyers in India for grunt work, for example. Part of it replaces lawyers — think LegalZoom or Rocketlawyer.

With the revolution occurring all around them, how have bar regulators (state supreme courts, the ABA, and state bars) reacted? Conservatively, to put it mildly. As Clayton Christenson (and others) explain, legacy providers frequently react to market disruptions by doubling down on their traditional way of doing business. Given the natural conservatism of America’s lawyers and judges, we should not be surprised.

The inaction has reached the point where I argue that we are witnessing a de facto deregulation of the market for legal services: lawyers are held to the same basic regulatory standards that have governed since the 1960s, while other providers of legal services have blossomed basically unregulated. This is a significant disadvantage to the legal profession. Have you wondered why there is not a 50-state, lawyer-run competitor to LegalZoom? Much of the answer rests on regulatory challenges like practicing law across state lines, advertising restrictions, conflicts of interest requirements, etc.

I am an inveterate techno-optimist, so this trend strikes me as unfortunate for lawyers, but great for the country. But will lawyer regulators continue to allow a thousand flowers to bloom? The ABA Report on the Future of Legal Services offers our first hints, and there is good news and bad news.

The good news starts with the excellence of the Committee itself, which included chair Judy Perry Martinez, vice chair Andrew Perlman, and reporters Renee Knake and Ben Cooper. Perlman, Knake, and Cooper are three of the very smartest people/law professors working in this area, so we were off to a good start.

The first half of the Report does not disappoint, and is as honest and searching an overview of where we are as you can find, a remarkable achievement for an ABA Committee. The ABA has never had a hard time critiquing America’s access to justice issues, issuing numerous reports on the plight of public defendersand legal aidlawyers. The big change in the Futures Report is the frank admission that simply hiring more lawyers alone will not fix these problems and that technology, self-help, and court reform are requiredanswers to our problems. That is a big deal! The ABA is (among other things) the professional lobbying organization for lawyers, so an admission that we should pursue solutions beyond simply hiring more lawyers is quite significant and promising.

The solutions half of the Report is less encouraging. As LegalZoom co-founder Eddie Hartman noted in a hilarious and scalding interview in Above the Law the Report offers a collection of solutions that are either well beyond the ABA’s control (“The criminal justice system should be reformed”), aspirational, self-serving, and unrealistic (“Individuals should have regular legal checkups”), or likely to make the situation worse (courts should “adopt rules and procedures for judicially-authorized-and-regulated legal services providers”).

Why am I unenthusiastic about court regulation of non-lawyer legal services providers? Because state supreme court regulation of legal services regularly favors lawyers at the expense of the public, even when the courts mean well. Dubious of this claim? Consider the much ballyhooed Washington State Limited License Legal Technicians (“LLLTs”) program. Created by order of the Washington Supreme Court in 2012, the LLLT program was an explicit attempt to help solve the access to justice program by creating a “nurse practitioner” equivalent for lawyers. LLLTs would be allowed to offer advice and draft documents in domestic relations law, but not to appear in court, and theoretically would offer cheaper services to an under-represented part of the market.

So maybe this is a hopeful example? Not so much. The Supreme Court placed the Washington State Bar Association (exactly the professional group that LLLTs might compete with) in charge of the regulation. The result? A very onerous set of requirements, including years of school and apprenticeship. In fact, LLLTs face regulation even more stringent than lawyers — LLLTs have to carry malpractice insurance but Washington’s lawyers do not.

These requirements have crippled the LLLT experiment. In June, 2015, the first class of LLLTs included only fifteen people. Only nine of them took the examination and only seven passed. By contrast, 814 people took the July bar examination.

The Practice of Law Board that originally launched the LLLT program publicly resigned en masse a few months later, citing numerous examples of opposition from the State Bar. So yes, do beware of lawyer regulators bearing gifts to non-lawyers. And yet there is still much to like in the report. If the first step to a solution is the frank admission that we have a problem, the Futures Report has started us off on the right track.